The First Court of Appeals in Houston has reversed a $1.5 million judgment against a Baylor College of Medicine joint venture in a lawsuit filed by a former sales executive who claimed he was cheated out of sales commissions he was owed.
The appellate ruling issued Thursday stemmed from a 2017 suit filed by Brandon Perthius, the onetime vice president of sales and marketing for Baylor Miraca Genetics Laboratories (known informally as Baylor Genetics), a genetic testing service that’s a joint venture of the College of Medicine and a Japanese company.
Baylor Genetics was represented at trial and on appeal by by Land Murphy, Jarod Stewart and Michelle Stratton of Smyser Kaplan & Veselka, a Houston-based commercial litigation firm. Perthius was represented by Reagan Douglas Pratt and Paul D. Flack of Pratt & Flack, also of Houston.
Perthius left Baylor Genetics in January 2017 and went to work for a competitor. In his lawsuit, he claimed Baylor Genetics owed him commissions on sales made after his departure “in perpetuity” if those sales were to customers he brought in while working for the company. He argued that the commissions were his since he had been the “procuring cause” of those sales. A Harris County District Court jury agreed, and in 2018 awarded Perthius $962,336.89 in compensatory damages plus pre- and post-judgment interest, totaling $1.5 million.
On appeal, that judgment was reversed. The First Court of Appeals held that Perthius’s employment contract with Baylor Genetics unambiguously promised him commissions only on sales made during his employment, and that “nothing in the contract indicates that Perthuis was entitled to a commission” for down-the-line sales for which he had been the procuring cause.
The appellate court said Harris County District Judge Larry Weiman erred in construing Perthius’s commission agreement and in his charge to the jury. The trial judge also wrongly excluded certain evidence related to the commission policies and practices of Baylor Genetics.
The company hailed the appellate opinion as a validation of its payment arrangements with commissioned sales personnel.
“Baylor Genetics takes great pride in how well we reward our employees,” said Vice President and General Counsel Maryam Tabatabai. “We are grateful that with SKV’s representation the court of appeals recognized Perthuis was paid in full pursuant to the terms of his agreement.”